The White House's Housing Supply Action Plan aims to increase housing affordability and supply through specific legislative and regulatory actions Counties can invest in the construction and preservation of affordable housing with new grant programs and expanded flexibility with ARPA Recovery funds
In May 2022, President Biden announced a set of legislative and regulatory actions as part of a broader Housing Supply Action Plan aimed to increase housing affordability and supply. Several federal agencies, including the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Treasury (Treasury), Internal Revenue Service (IRS) and the U.S. Department of Transportation (DOT) have taken steps to launch new programs and make several existing program more flexible to increase the supply of affordable housing.
Specific legislative and regulatory actions announced by the president include the following:
Housing Vouchers
- In September, HUD awarded over 19,000 Housing Choice Vouchers (HCVs) to nearly 2,000 Public Housing Agencies. In addition, in June HUD announced $43 million in Fiscal Year (FY) 2021 funding to fund approximately 4,000 new incremental housing choice vouchers, or "Stability Vouchers," focused on people experiencing unsheltered homelessness, including in rural areas.
- Each fiscal year, HUD sets a Fair Market Rent (FMR), which is used to determine the value of several housing vouchers distributed by HUD. It will be increased by 10 percent for FY 2023 to reflect the rising costs of rent.
Financing for the Construction of Affordable Housing
- Low Income Housing Tax Credits (LIHTCs) are the largest federal incentive for affordable housing construction and rehabilitation. On October 7, Treasury and the IRS established a new income-averaging rule that will allow housing projects to qualify for LIHTCs based on the average of the income limitations for rent-restricted units, rather than requiring a single income limitation for those units.
- In addition to the new income-averaging rule, the IRS announced the extensions of several deadlines for LIHTC projects that were delayed by public health, economic, and supply-chain issues.
- In July, Treasury released new guidance to provide additional flexibility to use American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (Recovery Funds) towards affordable housing. The new guidance included allowing counties to use Recovery Funds towards long-term loans to finance certain affordable housing projects, including projects expected to be eligible for LIHTCs.
- In September, Treasury and HUD finalized an agreement to restart the Federal Financing Bank’s Risk Sharing program that provides loans at reduced interest rates to local housing finance agencies to create and preserve affordable homes.
Coordination of Transportation and Housing Planning and Reformed Zoning and Land-Use Policies
- Earlier this month, DOT announced the Transportation Infrastructure Finance and Innovation Act (TIFIA) 49 credit program, which allows sponsors who are creating transit-oriented development projects (including public housing), transit and public infrastructure to borrow up to the maximum amount authorized in statute, 49 percent of total eligible costs, up from the 33 percent established by long-standing policy. Project sponsors can include county governments, transit agencies or private developers.
- DOT’s Thriving Communities Program (TCP), which will launch in 2023, will aim to facilitate the planning and development of transportation and community revitalization activities, and provide tools to ensure that under-resourced communities can access the historic funding provided in the Bipartisan Infrastructure Law (BIL).
- County governments that wish to receive support from the TCP program should submit a letter of interest to DOT by December 6.
- As of October 6, local governments, or agencies of local governments, can apply for funding to serve as a “capacity builder” to provide technical assistance, planning, and support to recipients of TCP.
- This year, DOT released three funding applications for competitive grant programs that reward jurisdictions that have adopted land-use policies to promote density and rural main street revitalization. One of these programs, the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant, was awarded primarily to counties for FY 2021.
NACo will continue to monitor opportunities for counties to increase the supply of affordable housing in their communities.
Additional Resources
